This Is Not a Recession. It’s an Ice Age.

This Is Not a Recession. It’s an Ice Age. By Annie Lowrey.

What is happening is a shock to the American economy more sudden and severe than anyone alive has ever experienced.

The unemployment rate climbed to its apex of 9.9 percent 23 months after the formal start of the Great Recession. Just a few weeks into the domestic coronavirus pandemic, and just days into the imposition of emergency measures to arrest it, nearly 20 percent of workers report that they have lost hours or lost their job. One payroll and scheduling processor suggests that 22 percent of work hours have evaporated for hourly employees, with three in 10 people who would normally show up for work not going as of Tuesday.

Absent a strong governmental response, the unemployment rate seems certain to reach heights not seen since the Great Depression or even the miserable late 1800s. A 20 percent rate is not impossible. …

The markets are not normal, either. The stock market lost 20 percent of its value in just 21 days—the fastest and sharpest bear market on record, faster than 1929, faster than 1987, 10 times faster than 2007. The financial system has required no less than seven emergency interventions by the Federal Reserve in the past week. The country’s central bank has wrenched interest rates to zero, started buying more than half a trillion dollars of financial assets, and opened up special facilities to inject liquidity into the financial system.

Yet in the real economy, everything has halted, frozen in place. This is not a recession. It is an ice age.